Most cuts hitting services, says budget watchdog

Parliamentary budget officer Kevin Page, seen here during an appearance before a Commons committee in February 2011, issued a report Monday showing that most of the federal budget cuts will come from programs, not overhead. (Adrian Wyld/Canadian Press)

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Kevin Page, the parliamentary budget officer, says the vast majority of spending cuts announced in last March's budget will have a direct impact on programs delivered by the federal government.

This finding contrasts with Finance Minister Jim Flaherty's statement that the budget savings of $5.2 billion would affect mainly what he called "the back office."

The PBO says that only 15 per cent of cuts will be to what's termed "internal services," meaning departmental overhead. The remaining 85 per cent of savings will come from programs and services that will affect the people who rely on them.

Tuesday the PBO published a spreadsheet that compiles all the information on how government departments will implement the 5 to 10 per cent of cuts that the federal government said each department would have to find.

The details are somewhat sketchy. For instance, Health Canada, a huge department that has to take a substantial cut, has not provided any details about how any of its many programs will be hit. Aboriginal Affairs has indicated that one-third of the cuts it must undergo — an annual amount of about $46 million — has not yet been allocated, even though the budget was introduced seven months ago.

"It's been seven months," said Page, "with multiple letter exchanges with deputy ministers, multiple letter exchanges with the clerk of the Privy Council, and this is all we've got to show for it, but still, it's something, and we are definitely not going to give up."

The lack of information raises the question about how ministers approved some of the spending cuts if, as it seems, they did not know how some programs and services would be altered by slashes to their budgets.

Page and his staff have put together the information they did manage to obtain about cuts to specific programs, and compared it to the performance indicators or targets of those programs that were in place before Budget 2012.

Food inspection will be hit

For instance, the Canadian Food Inspection Agency will be hit with an annual cut of $19 million in its Food Safety Program. The Food Safety Program states that its target is for 98 per cent of inspected federally regulated establishments to be in compliance with federal regulations. The CFIA did not provide information about how the $19 million cut could affect that 98 per cent compliance goal.

It's a source of frustration to the PBO that most government departments refuse to deliver information about the consequences of the cuts to their programs, including what services will be diminished if not eliminated, what targets will not be met, and how many jobs will vanish.

On the jobs front, although Flaherty said 19,200 jobs will disappear, of which 7,000 are to happen through attrition, the PBO could only find specific information about 500 jobs.

The Privy Council Office, as well as some government ministers, has said that information about job cuts and service levels is outside the mandate of the PBO.

Page has made it clear he feels he cannot do his job providing parliamentarians advice about the state of the nation's finances without knowing, not just the amount of cuts, but also the consequences.

"We need to see the spending plan so we can kick the tires and do the verification for parliamentarians … right now we're just trying to tease up the spending plan. Effectively, it should have been in place right after the budget, so we're still waiting for it," Page said.

He continued, "We need members of Parliament, we need Canadians to increase the pressure on the government to release this information."

Page is still waiting for an independent legal opinion he has asked for about the extent of his mandate.

Late Tuesday, a spokesperson for Treasury Board President Tony Clement said in an email that 70 per cent of savings announced in the budget would be coming from "operational efficiencies."

The email listed some of those "efficiencies from back office operations:"

Reducing internal and corporate overhead expenditures.

Reducing program administration and operating costs, which are reflected in program alignment architectures.

Consolidating corporate services across departments by combining both physical space and administrative expertise such as human resources and financial services, communications and IT.

Reducing travel expenses by using virtual tools such as teleconferencing, videoconferencing and virtual presence.

Replacing paper publications with online content and providing businesses and Canadians more electronic information and service options to reduce the paper burden.